Form 10-K for the fiscal year ended December 31, 2024
Park National Corporation, a bank holding company, filed its annual report for the fiscal year ended December 31, 2024. The company reported total assets of $13.4 billion, total deposits of $10.3 billion, and total loans of $7.4 billion. Net income for the year was $143.1 million, or $4.44 per diluted share. The company’s return on average assets (ROAA) was 1.14%, and its return on average equity (ROAE) was 12.35%. Park National Corporation is a large accelerated filer and is listed on the NYSE American under the ticker symbol PRK. As of June 30, 2024, the company’s aggregate market value of common shares held by non-affiliates was $2.235 billion.
Park Financial Group Reports Strong 2024 Results
Park Financial Group, a regional banking and financial services company, has released its financial results for the year ended December 31, 2024. The company reported solid performance, with increases in net income, pre-tax pre-provision net income, and key profitability metrics compared to the prior year.
Robust Financial Performance
In 2024, Park Financial Group reported net income of $151.4 million, a 19.5% increase from $126.7 million in 2023. This improvement was driven by higher net interest income, increased non-interest income, and disciplined expense management.
Pre-tax pre-provision net income, a non-GAAP metric that excludes the impact of credit loss provisions, grew 27.3% to $199.3 million in 2024 from $156.5 million in 2023. This measure provides a clearer picture of the company’s core operating performance.
The return on average assets, a key profitability ratio, increased to 1.53% in 2024 from 1.27% in 2023. Similarly, the return on average tangible equity rose to 14.65% from 13.60% over the same period. These improvements demonstrate Park’s ability to generate strong earnings relative to its asset base and shareholder equity.
Drivers of Performance
Several factors contributed to Park’s solid financial results in 2024:
Net Interest Income Growth: Net interest income, the company’s primary revenue source, increased by 6.7% to $398.0 million in 2024. This was driven by a 60-basis-point expansion in the net interest margin to 4.41%, as the average yield on interest-earning assets rose faster than the cost of interest-bearing liabilities.
Increased Non-Interest Income: Non-interest income, which includes fees, commissions, and other revenue sources, grew 32.3% to $122.6 million. This was largely due to higher income from fiduciary activities, debit card fees, and gains on equity securities.
Disciplined Expense Management: Total other expenses increased by 3.9% to $321.3 million, a slower pace than the growth in revenues. This reflects Park’s focus on controlling costs while investing in technology and talent to support its operations.
Provision for Credit Losses: The provision for credit losses increased to $14.5 million in 2024, up from $2.9 million in 2023, as the company proactively built reserves to address potential economic uncertainties.
One-Time Items: The 2024 results included a $6.1 million pension settlement gain, while 2023 included a $7.9 million loss on the sale of debt securities.
Loan and Deposit Growth
Park’s loan portfolio grew 4.6% in 2024 to $7.82 billion, with increases across most loan categories, including commercial real estate, construction, and residential real estate. The company’s deposit base also expanded, rising 1.3% to $8.14 billion, driven by growth in savings and time deposits.
The allowance for credit losses increased to $88.0 million, or 1.13% of total loans, at the end of 2024, up from $83.7 million, or 1.12%, a year earlier. This reflects management’s prudent approach to credit risk management and the uncertain economic environment.
Shareholder Returns and Capital Position
Park continued to reward its shareholders through dividends, declaring $4.74 per share in 2024, up from $4.20 per share in 2023. The dividend payout ratio was 51% of net income, in line with the company’s target of 50%.
Park’s capital position remained strong, with a total shareholders’ equity to total assets ratio of 12.69% at the end of 2024, up from 11.64% a year earlier. The tangible equity to tangible assets ratio, a key measure of balance sheet strength, improved to 11.21% from 10.14% over the same period.
Outlook and Strategic Priorities
Looking ahead, Park Financial Group remains cautiously optimistic about the economic environment, though it is closely monitoring potential risks, such as rising interest rates and inflationary pressures. The company is focused on the following strategic priorities to drive future growth and profitability:
Organic Loan and Deposit Growth: Park will continue to leverage its community banking model and strong customer relationships to grow its loan portfolio and deposit base in its core markets.
Diversification of Revenue Streams: The company will seek to expand its fee-based businesses, such as wealth management and mortgage banking, to reduce its reliance on net interest income and enhance its overall revenue mix.
Operational Efficiency: Park will maintain its disciplined approach to expense management, investing in technology and process improvements to drive greater efficiency and productivity.
Risk Management: The company will remain vigilant in its credit underwriting and risk monitoring practices to ensure the quality of its loan portfolio and protect against potential economic headwinds.
Capital Allocation: Park will continue to balance its capital deployment between organic growth, strategic acquisitions, and shareholder distributions to maximize long-term value creation.
Overall, Park Financial Group’s 2024 results demonstrate the company’s ability to navigate a challenging environment and deliver strong financial performance. By executing on its strategic priorities, the company is well-positioned to continue generating sustainable growth and returns for its shareholders.
